Investors keen on buying single-family homes

Las Vegas Sun reported that investors are now hot on buying single-family homes in Las Vegas, not for appreciation potential, but for rental income.

Investors are picking up mostly the foreclosed properties. Short sales in Las Vegas can be a 2 to 4 month wait for approval. Home buyers who will occupy the home they buy, have been turning to short sales as an alternative to the competetive REO market that is flooded with the cash buyers.

Short sales in Las Vegas can be just as good of a deal as the bank owned homes in Clark County. Anyone who has the aptience to wait one out may end up with a ahome that is in much better condition as compared to foreclosed home.

Larry Murphy, president of SalesTraq, a Las Vegas housing research firm, reported that over the past year, single-family homes performed best out of all the real estate investment categories. Murphy said single-family home has always been the preferred house of choice by most people. He said most people want the picket fence and the back yard.

Murphy added that between the first six months of 2008 and first six months of 2009, the median price of single-family homes fell by 34 percent in Clark County, NV.

According to Steve Bottfeld, executive vice president of Marketing Solutions, investors are buying single-family homes to earn money from rental income.

It is logical for someone to buy in cash a home in Las Vegas for $100,000 and then rent it for $1,000 a month as this corresponds to a 12 percent return before taxes and other expenses, Bottfeld said. He added that even if one can only get an 8 percent return, this is better than getting a 2 percent return or interest from the bank.

Glenn Plantone, president of the Real Estate Insiders Club in Las Vegas, reported that investors are making the most out of the drop in home prices. Plantone said that in some instances, prices of homes fell by 70 percent in the northwest. He said homes sold for about $300,000 are now being sold for about $110,000.

Plantone added that home rental remains a strong market as people prefer renting a home than an apartment. He said homeowners who lost their homes to foreclosure prefer to rent a home than an apartment.

The president of SalesTraq added that over the past year, land fared second after single-family homes. Even with the financial crisis, Murphy said land remains a precious commodity in Las Vegas.